FSA fines former analyst for misleading message

14 Jan 2011

1

A former senior research analyst at MF Global Securities was fined £50,000 by the Financial Services Authority (FSA) for sending an instant message to 14 of his clients purporting to contain new information on pub chain Enterprise Inns.

Gower's message followed a meeting on 7 May, 2008, with the chief executive of Enterprise Inns in which he said he was told the company was expected to receive the HM Revenue and Customs (HMRC)'s permission for converting itself into a real estate investment trust.

He said the move would have a positive impact on the business's earnings.

Starting off with the phrase "Hot off the press", Gower stated brief details of the meeting in 74 words.

According to the FSA the details of the meeting were in the public domain.

Margaret Cole, the FSA's managing director of enforcement and financial crime said there was no excuse for a senior retail analyst to be so careless with a message that could have such an impact on the market.

She added that Gower's dissemination of inaccurate information contributed to a large increase in the volume shares quoted and a disorderly market in Enterprise Inns shares.

Shares of the company rose sharply on the news and news provider Bloomberg quoted from it.

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